TaxTMI 
TaxTMI 
1985 (7) TMI 99
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....tioner Katihar Jute Mills Ltd. is manufacturing diverse jute products including sacking, hessian, jute twine and jute yarn in their factory premises, and are duly licensed to do so under the Rules. The jute industry being one specified in Schedule to the Act, a cess can be levied under Section 9(1) of the said Act read with the Central Excises and Salt Act, 1944 and the Rules framed thereunder. The gravamen of the petitioner's case is that jute twine and yarn in a continuous process of manufacture in their mill directly go to the weaving section for weaving and hemming and their ultimate conversion into hessian or sacking goods. Therefore, jute twine and yarn are not manufactured or marketable products nor are they removed from the premises of the factory as such, with the significant result that they are not liable to any excise duty or cess thereon. Nevertheless the respondent excise authority had created demands against the petitioner on the basis of quantity of jute twine and yarn consumed within the factory in the manufacture of jute goods with effect from April, 1976. Aggrieved thereby, the petitioner had preferred this writ petition way back on the 4th of the January, 1980 t....
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.... Act. It is well known that ticklish difficulties were posed in the levy of excise duty on products in a continuous process of manufacture in a mill or a factory. The concept of 'removal' from the precincts of the factory which in certain cases was the taxing event attracting the levy of excise duty was equally a matter not free from difficulty. Conflicting views have been taken by the various High Courts with regard to what would amount to removal under the Central Excises and Salt Act and the Central Excise Rules. To overcome these difficulties or, to use a known expression of the law, in order to remedy this evil, the framers introduced a radical change in the provisions of Rules 9 and 49 of the Excise Rules. In order to notice the qualitative change wrought therein, it seems apt to juxtapose the relevant parts of the amended rules against the existing ones: Before amendment aforesaid After amendment aforesaid "9. (1) No excisable goods shall be removed from any place where they are produced, cured or manufactured or any premises appurtenant thereto, which may be specified by the Collector in this behalf, whether for consumption, export, or manufacture of any other commodity ....
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....tion or utilisation. 49. (1) Payment of duty shall not be required in respect of excisable goods made in a factory until they are about to be issued out of the place or premises specified under Rule 9 or are about to be removed from a storeroom or other place of storage approved by the Collector under Rule 47. 49. (1) Payment of duty shall not be required in respect of excisable goods made in a factory until they are about to be issued out of the place or premises specified under Rule 9 or are about to be removed from a storeroom or other place of storage approved by the Collector under Rule 47 "(3) Notwithstanding anything contained in sub-rule (1),the Central Government may, under circumstances of exceptional nature, allow, by notification in Official Gazette, any excisable goods to be removed from the factory in which they are produced without payment of duty leviable thereon subject to such conditions and limitations (including payment of interest on the balance amount of duty) as may, from time to time, be specified by the Central Government. The manufacturer of such excisable goods shall execute a bond in the proper form with such surety or security as the Collector may ap....
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.... always had, effect on and from the date on which the Central Excise Rules, 1944, came into force. (2) Any action or thing taken or done or purporting to have been taken or done before the 20th day of February, 1982, under the Central Excise Act and the Central Excise Rules, 1944, shall be deemed to be, and to have always been, for all purposes, as validly and effectively taken or done as if the amendments referred to in sub-section (1) had been in force at all material times, and, accordingly, notwithstanding anything contained in any judgment, decree or order of any court, tribunal or other authority- (a) all duties of excise levied, assessed or collected before the 20th day of February, 1982, on any excisable goods under the Central Excise Act, shall be deemed to be, and shall be deemed to have always been, as validly levied, assessed or collected as if the amendments referred to in sub-section (1) had been in force at all material times; (b) no suit or other proceeding shall be maintained or continued in any court for the refund of, and no enforcement shall be made by any court of any decree or order directing the refund of, any such duties of excise which have been collecte....
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....nce that is done, it is manifest that Rules 9 and 49 as amended must be deemed to have been on the statute book with effect from 1944. That being so, reference to other provisions or peripheral issues becomes irrelevant in the context of the retrospectivity of the rules. 8. Mr. Aftab Alam, the learned Counsel for the respondent Revenue, had rightly pointed out that though the cess is leviable under Section 9 of the Industries (Development and Regulation) Act, the procedural provisions for its collection are entirely dovetailed into the Central Excises and Salt Act and the Rules framed thereunder. Our attention was drawn to sub-section (2) of Section 9 which provides that a cess is to be levied in the manner prescribed. This would take us to Section 3(g) of the Industries (Development and Regulation) Act which brings in the provisions of the Central Excises and Salt Act. Equally reference may be made to the Jute Manufacturers Cess Rules, 1976. Reference to Rule 2(c) and 2(g) and Rule 3 thereof would leave no manner of doubt that the procedural provisions applicable are those under the Central Excises and Salt Act and the Rules framed thereunder. Our attention was also drawn t....